Having said that – a refinance and equity release often happen at the same time.

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Jamie

Borrowing against an investment property to pay yourself back money that you’ve previously contributed wouldn’t justify a deductible expense.

I’m not an accountant though so please seek pro advice.

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Jamie

Some lender are still ok with cashouts up to 80% for investment purposes – it generally involves a full application process.

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Jamie

What’s the issue from the banks perspective? Is it lack of a deposit?

What size block are you looking to build on?

Which lender have you approached so far?

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Jamie

What benefits do you believe you’ll obtain by investing via a different entity?

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Jamie

Best to avoid crossing – it can cause a real mess.

Having said that – you can have all loans with the one lender and keep them uncrossed. It’s quite easy to do.

Let your broker know if you’re unhappy with the structure he/she has outlined. The $1k fee seems a bit rich if they’re providing you with poor structure advice.

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Jamie

This is an area I’ve started to take a closer look at. Some clients are starting to go down this path and my wife runs an airbnb management company so I’ve taken more of an interest in it.

1. Is income solid?
Like any investment – some will do better than others. If the property is in a popular tourist destination that isn’t dependent…[Read more]

This is an area I’ve started to take a closer look at. Some clients are starting to go down this path and my wife runs an airbnb management company so I’ve taken more of an interest in it.

1. Is income solid?
Like any investment – some will do better than others. If the property is in a popular tourist destination that isn’t dependent…[Read more]

Having said that – there are other factors involved when taking into account max borrowing for investors. Some lenders add back negative gearing, some take a higher percentage of rental income, some cap the yield….the list goes on.

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Jamie

Most lenders differentiate between owner occ and investment.

With some lenders it’s a straight forward process – with others it can be more difficult.

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Jamie

Most are real estate agents in disguise – making massive commissions from overpriced off the plan properties.

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Jamie

Any particular reason you’re narrowing it down to only NSW?

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Jamie

The loans don’t have to be via two different lenders – you can have the two loans (equity release and IP) with the one lender and still keep the loans uncrossed. The benefit here is that you’ll be able to negotiate a better rate discount due to the higher aggregate borrowings. If you’re on a…[Read more]

If you’ve got strong, recent, comparable sales – have those available to show the valuer.

In terms of best bang for your buck – usually painting/flooring is the cheapest value add.

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Jamie

As above – you could engage an REA and get their opinion.

Otherwise – you could get a valuation done now and another done after the work is complete.

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Jamie

You need to a) save a deposit and b) show evidence to a lender that you can service the loan you’re applying for.

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Jamie

Which suburb is the property in? I have one in Downer that’s near a future light rail stop. The recent growth in the area has been quite good!

Whether another purchase is doable depends on your borrowing capacity. On the surface – it looks like you have enough equity to support a second purchase so it will just come down to your…[Read more]

Having said that – finding a good property manager isn’t always easy :-( I’ve had some shockers, some great ones and everything in between.

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Jamie

Realistically – you’ll need to bolster that income. Whilst technically it’s probably possible to purchase something (providing you live rent free, have no debts, minimum living expenses and a deposit) – that property will prob be in an undesirable area with little prospects for growth.

I’d focus on the income side of things before…[Read more]

Personally – I like to minimise conflicts of interest so I’d appoint my own MB rather than go with the one the REA is recommending.

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Jamie

All comes down to the lender/scenario.

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Jamie

If you have no intention of purchasing an owner occ in the future – and if cashflow enables it then I’d consider going down the P&I path.

With the rate difference between P&I and IO widening these days – you’ll probably find that the monthly repayments aren’t going to be drastically different (depending on how long your previous IO term ran…[Read more]

Best to keep the loans uncrossed.

It’s easy to do. Assuming you have one PPOR and are looking to purchase one IP. The structure is pretty much:

PPOR
Loan 1: Current mortgage
Loan 2: Equity release to cover 20% deposit and stamp duty on IP

IP
Loan 3: Investment loan to cover remaining 80% against IP (deposit comes from loan 2…[Read more]

If it’s dividends – and if you can demonstrate some consistency in terms of the duration you’ve held the shares, etc then you can use that income for servicing.

However – not having earnings from s/e or PAYG sources will likely cause headaches unless your investment income is high.

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Jamie

Are you looking to do an equity release for $200k at 87% ?

If so – that’s not an easy deal to get approved!

Banks aren’t overly keen on large cashouts above 80% LVR these days. If you’re going above 80% you’ll most likely need to have evidence of what that $200k is being used for.

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Jamie

Factors that come into play are the size of your deposit, the length of time you’ve been in the industry you currently work in and the duration of your contract.

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Jamie

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Jamie

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Jamie

Richard above would be a good starting point.

Sounds like you need a decent, IP savvy broker rather than a financial planner.

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Jamie

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Jamie

Unit 11, 1 Central Avenue
Thornleigh NSW 2120
Ph 02 9875-2444 (61-2-98752444)
Fx 02 9481-0594 (61-2-94810594)

Probably not with a mainstream lenders unless you are deriving a lot of income from other sources.

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Jamie

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Jamie

As a very general rule – valuations for refinancing tend to be on the conservative side. It’s not uncommon for a valuers estimate to be less than the client believes their home to be worth.

On the flipside – it’s not uncommon for purchase valuations to come back at the purchase price. It’s quite rare for them to come in less.

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Jamie

Yep – I’ve done it before.

It was part of our offer. We required access to the property post exchange/pre settlement to carry out some renovations.

Our solicitor put something in writing to the owners solicitor – the owner signed off on it and everyone was happy.

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Jamie

Sounds like you’re simply dealing with a real estate agent who’s trying to sell you a property.

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Jamie

Which state are you looking to purchase in?

BA fees vary quite a bit – on average I’d budget circa $10k

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Jamie

They’ll be able to run the numbers for you.

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Jamie

There’s some second/third tier lenders that are reasonably competitive but have terrible borrowing capacity calculators for investors – such as Suncorp, ING etc

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Jamie

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Jamie

Definitely sounds like a second opinion is worthwhile – and you can’t go wrong with Corey above.

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Jamie

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Jamie

Especially if on a low/average income.

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Jamie

Only you can make the decision regarding whether fixing is the best option for you or not.

If you’re planning on investing further- and if the property with the loan you’re considering fixing is involved in those plans….then it might be best to leave the loan as variable so you maintain a level of flexibility.

If it’s a set and…[Read more]

Best bet is to get Richard to sort it out for you – he does this stuff everyday of the week and has already provided some excellent input.

Cheers

Jamie

Have a chat with a broker that specialises in investment property financing – you might get a better result.

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Jamie

It’s impossible to answer without a crystal ball :-)

Melbourne has grown quite quickly of late. Canberra is also on the rise – probably not at quite the same pace as Melbourne.

Which one to invest in now is a difficult one to answer. Personally – because I have a good understanding of the market and access to trades for renovation work -…[Read more]

Canberra is doing well too – but I suspect there’s still a bit of growth left in the current cycle.

It’s a tough question!

Cheers

Jamie

No probs :-)

1) You can claim the cost of stamp duty against your income. You can do this during the financial year that you make your purchase. So if you purchased a property this financial year and the duty was $20k – then you’d claim that $20k as a deduction when you do your 16/17 tax return. However – all investment properties in…[Read more]